Macy's announced that there will be a layoff of about 5,000 jobs as well as the closure of 7 of their stores.
The decision came in after the reports of their holiday store opening only rose to 1.1% from last year. Though the company said their holiday performance is "solid," it still did not convince the market as their stock fell 7.1% after trading closed today.
Aside from the 7 store closing announced, they will also be closing the locations in Laguna Hills, Calif., Westside Pavillion, Los Angeles, Stonestown Galleria, San Francisco and Magic Valley Mall, Twin Falls, according to USA Today.
All in all, Macy's will be closing 81 out of their 100 stores.
The Move Towards eCommerce
eCommerce is now dominating the consumer industry and retail is failing. (Image via iStock)
With the rise of eCommerce giants like Alibaba, Amazon and eBay, Macy's, as a retailer, is catching up late. Though these are drastic changes, it should have been implemented at least two years ago.
However, Macy's CEO Jeff Gennette said they are "looking ahead to 2018" and are focused on creating necessary improvements by moving "faster."
Macy's may have shifted on digtal but it doesn't mean they were not profitable. Their product lines like activa apparel, beauty, shoes and jewelry were some of the items that performed well. Their digital sales also increased over the past year.
GlobalData Retail Analyst Neil Saunders said the digital support has shown them a "positive impact on performance," but this does not guarantee Macy's overall longevity.
Saunders added that these moves simply serve as a warning sign that they need to do more to "restore business health."
While we believe these actions are necessary, we maintain that the focus should be on growing the top-line through improvements to stores, ranges and the general proposition
- Neil Saunders -
[Image via ozgurdonmaz/iStock]